Van Elle Share Discussion Threads

[lammylover] 25/1/2018 08:18

H1 results good, H2 to be hit by Carillion failure, but this had already been announced. BOD just managing expectation for H2. Long term hold here, I reckon for growth and dividend. A few contract wins and price will go past 100p again. Just my view Rich

[dahhad] 25/1/2018 07:46

Such a negative statement re the 2nd half of the year IMHO means that the share price will be hammered!

[jonwig] 25/1/2018 07:31

H1 results are out. Looks like a struggle between long-term attractions and short-term disappointment (for the current full year).

[mfhmfh] 19/1/2018 16:32

Otus Capital Management above 5%.

[bogdan branislov] 17/1/2018 13:46

jonwig: Re Carillion. Forensic accountants were not needed, the liabilities on Carillion's balance sheet were as clear as night and day. To still pay the dividend was an indication that mgt did not grasp it at all. This was a GCSE level business question, not complex at all. Brokers and fund mgrs are a clueless lot for the most part they just follow the herd - Government still awarding, must be ok, just can't understand, given the value of carillion as a govt contractor, that they were not given some govt advice re debts, deficits and divis - if the divi had been halved 5 years ago we would not be here now. Van Elle - yes they will nearly always be subbed in, nothing wrong with that, our infrastructure is creaking, under invested for years. Also, Van Elle are good at the difficult end of ground works - I watched them on the A1 upgrade a few months ago - inserting pilings into a vertical rock wall alongside the new road in order to secure a heavy duty restraining mesh - a difficult op, they have a strong niche. Bogdan

[jonwig] 17/1/2018 11:54

@bogdan - I agree with much of that. But up to maybe six months ago, fund managers were still invested in CLLN, brokers were still giving buy/hold recommendations and in fact some funds still held positions with zero value on Monday. The government clearly didn't employ forensic accountants either!

All praise to the hedge funds who saw from the accounts and talking to subcontractors just what was going on. Scuttlebutting was a big factor in taking short positions. Contrary to popular belief, shorters don't make companies bankrupt, potentially bankrupt companies attract shorters - who lose money themselves often enough.

My own view was that CLLN didn't fit my risk profile so I never even thought of investing. VANL is, I agree probably a very sound company. Trouble is, muckshifting is such an interconnected sector that often events are out of one's control.

[bogdan branislov] 17/1/2018 11:16

Van Elle has had a lot of turbulence during its short quoted history. The HS2 work delay, the attempted boardroom coup and now Carillion. The HS2 delay reassured me, that is the promptness with which van Elle informed us. The decisiveness with which the boardroom coup was seen off was also good, shareholders were forced to take a very close look and liked what they saw. As for Carillion. I have always rejected the many buy recommendations over the years due to Carillion's balance sheet looking like a slice of Swiss cheese for as long as I can remember. Were Van Elle reckless to work for Carillion? Not in my view, although Carillion's weak balance sheet has always made it vulnerable to events, this has been the case for a decade and could have remained the case for another decade. Van Elle's exposure is not excessive, working for Carillion was the right thing to do. Carillion is a strange contradiction. Poor financial management - which has been plain to see for a decade or more to anyone who can read a balance sheet - and paying such a big divi with their debt and pension deficit was reckless. But operationally Carillion were not incompetent at all. Pity that their major customer, Government, did not have a word some years ago saying that the balance sheet must improve, cut the divi or we will regard you as high risk for further contracts - that may have been all it would have taken. Oh, and Van Elle is clearly a strong buy at this price, one of the strongest 5 stock opportunities out there in my view. Best, Bogdan.

[jimmywilson612] 16/1/2018 16:24

I've taken an initial position here - feel that whilst it's an unfortunate position - I believe most of the work will be sucked up by the wider market so shouldnt effect too much future revenue/profitability.

I also think the business financial sound to see it through this current setback - the problems are to do with Carillion and not Van Elle.

[mfhmfh] 16/1/2018 14:09

Paul Scott's view:

'Its exposure to Carillion looks quite small, at £1.6m - being the total outstanding debt and work-in-progress. Note that the market has knocked about £6.1m off Van Elle's market cap today.'

'These numbers are small relative to Van Elle's market cap, and I would be inclined to buy the dip, if I liked this company. Having just done some checks, my view is that Van Elle has a strong balance sheet, and is strongly profitable. Therefore it should be able to easily cope with the sort of numbers mentioned in today's RNS, without any threat whatsoever to the company's solvency.

Therefore, providing nothing else comes out of the woodwork, based on today's announcement, Van Elle shareholders can relax. This is a relatively modest, one-off hit to earnings & the balance sheet, that should not do any long-term damage to the company.'

[gutterhead] 16/1/2018 08:50

The govt can take a hard line but some one has to do the work and get paid-If van Elle walk away from the job, some one else would have to do it and get paid
if delays in work start hitting the headlines and affecting peoples day to day lives, that will be a nightmare for the govt
I hope/think common sense will prevail

[hooverdam99] 16/1/2018 08:32

What disturbs me is that the management obviously didn’t carry out a financial risk assessment before they carried out this work given the warnings. Smacks of incompetence to me.

[redartbmud] 16/1/2018 08:26

Unpaid debts will undoubtedly remain - unpaid.
The Government is taking a very hard line and Clln debts are of seismic proportions.
Cash resources and balance sheet damaged. Short term disruption on existing contracts means plant and staff are idle until the contracts resume.
In the longer term this will be seen as a blip.

[sundance 13] 16/1/2018 07:46

Not convinced it'll drop as far as 80p though, the required work hasn't disappeared, it'll just have to be directly Govt funded or picked up by another supplier. One way or another VANL will probably end up doing it still. It's more the cash flow impact, but VANL have a strong balance sheet.

[gutterhead] 16/1/2018 07:43

you're not alone Graham. rose tinted specs moment for many. myself included.
Hope triumphed over common sense

[sundance 13] 16/1/2018 07:42

Frustrating isn't it, only recently bought myself and didn't realise they had direct and material exposure to CLLN, if only I'd checked this BB yesterday, it was flagged by several posters! The danger of being a part time investor.

[grahamandkay] 16/1/2018 07:35

What was I thinking, I know and work in the construction industry and was going to sell up yesterday as I knew VANL would have major contracts with carillion and it was a no brainer that there would be a fall out. Something stopped me, stupidty!! At the very least I would have been able to buy back in this morning at around 80p no doubt and increase my holding. What was I thinking, head in my hand moment!!! lol.

[hybrasil] 16/1/2018 07:34

These things happen in this business

I won't be selling

[dahhad] 16/1/2018 07:31

The usual big spread will emphasise the fall IMHO

[pugugly] 16/1/2018 07:15

I am calling down 10% plus on opening

[hooverdam99] 15/1/2018 22:03

I’m guessing they are rewriting their interim report as we speak.

[gutterhead] 15/1/2018 18:47

The company should make an announcement to clarify the situation. Whether good or bad.
We shouldn’t be guessing

[hooverdam99] 15/1/2018 18:36

Not only bad debt but existing contracts too which are likely to be in doubt.

[brummy_git] 15/1/2018 09:13

Although things might have changed over the past 12 months, my understanding is that along with the other big contractors (such as Balfour Beatty, Costain,etc), van Elle is a subcontractor to Carillion.

Standard payment terms are around four months, so there is likely to be at least some residual bad debt to write off and existing contracts to novate.

[jonwig] 15/1/2018 08:42

hoover - the only mention of CLLN in VAN's IPO document was as a "competitor" which I found surprising, as I'd be more likely to see VAN as a subcontractor.

I guess all CLLN's key contracts will be taken under government control, and the gov't is paying the administrator to keep them running up to finalising the liquidation. So I wouldn't be too worried about that. Shareholders and creditors will be for the chop.

[hooverdam99] 15/1/2018 08:34

I hope Van Elle have no money outstanding from Carillion!